It was incorporated in 2012 as one of the first subsidiaries of Pham Nhat Vuong’s giant company.
Like other subsidiaries of Vingroup, Vincom Retail also aimed for rapid growth and expansion.
Starting in 2015, the company opened dozens of new malls each year and absorbed several smaller brands.
It has developed several shopping center models at different scales, as well as offices, apartments and shops in or near its shopping centers.
In five years, it has developed a total of one million square meters of commercial space and sold more than 1,000 shops, apartments and condotels.
Vincom Retail’s revenues and profits have increased alongside its rapid expansion.
Between 2014 and 2019, its revenue jumped 4.8 times, from VND1.92 trillion ($77.4 million) to VND9.2 trillion, and profits from VND105 billion to 2.85 trillion. VND.
It then suffered a 30% drop in revenue and 40% drop in profit during the Covid years in 2020 and 2021.
But over the next two years, its performance recovered and even exceeded that before the pandemic.
Last year, the company reported record revenues and profits of VND9.7 trillion and VND4.4 trillion.
This meant that Vincom Retail lagged behind the conglomerate’s real estate and automotive subsidiaries in terms of profits.
But despite this exceptional performance, Vingroup’s board of directors on Monday approved the sale of 100% of the capital of SDI Trading Development and Investment JSC, which owns Sado, the largest shareholder of Vincom Retail with a 41.5% stake. .
This effectively reduces Vingroup’s stake to 18.8%.
Analysts estimated the value of the deal at VND39.1 trillion ($1.6 billion).
Vingroup is expected to sell 55% of its stake in SDI this month for VND21.49 trillion and the rest within six months.
According to securities company Vietcap, profits from this transaction are expected to be estimated at 21.52 trillion VND.
Nguyen Viet Quang, vice chairman and CEO of Vingroup, explained that the company needs to focus all its resources on key brands with high growth potential.
Taiwanese investment bank Yuanta Securities said the transaction would significantly reduce debt pressure on Vingroup.
It has about $3.9 billion remaining due this year, he said.
As for Vincom Retail, Yuanta analysts said: “Its fundamental factors will not change much.”
The most notable risk for the mall operator is rising land costs which would affect future projects and potentially depress its stock price, they added.
